Office Depot Announces First Quarter 2018 Results

Q1 2018 Reported Sales of $2.8 Billion
Services Revenue Increases to 14% of Reported Sales
Business Solutions Division (BSD) Returns to Growth
Q1 2018 Operating Income of $77 Million
Q1 2018 Operating Cash Flow of $207 Million
Increases Full-Year Outlook for 2018

Office Depot, Inc. (“Office Depot,” or the “Company”) (NASDAQ: ODP), a leading omni-channel provider of business services and supplies, products and technology solutions, today announced results for the first quarter ended March 31, 2018.

“I am extremely pleased that we continue to see positive momentum in our core businesses and delivered financial results in the first quarter which, although lower than the prior year, exceeded our recent outlook,” said Gerry Smith, chief executive officer of Office Depot. “We achieved a major milestone this quarter with the Business Solutions Division reporting positive sales growth for the first time since 2012. This is largely driven by our focus on growing the customer base with our demand generation efforts and successfully expanding our offerings beyond office products. When combined with CompuCom, these business-to-business (B2B) focused divisions represent nearly 60% of total sales. I’m also pleased that our continued focus on working capital management allowed us to generate strong cash flows in the quarter, which further strengthens our liquidity and provides additional capital to strengthen our operations and invest in growth initiatives.”

Reported (GAAP) Results
Total reported sales for the first quarter of 2018 were $2.8 billion compared to $2.7 billion in the first quarter of 2017, an increase of 6%. As a result of the CompuCom acquisition and focus on growing services revenue, the Company has enhanced its disclosure to report the breakdown between product sales and service revenues. Office Depot’s service revenues now make up approximately 14% of the Company’s total sales.

In the first quarter of 2018, Office Depot reported operating income of $77 million and net income from continuing operations was $33 million, or $0.06 per share, compared to operating income of $124 million, net income from continuing operations of $74 million and $0.14 per share in the first quarter of 2017. The decrease was primarily due to lower gross margins from store and supply chain cost deleverage as well as higher selling, general and administrative expenses.
more detail at: http://investor.officedepot.com/phoenix.zhtml?c=94746&p=irol-newsArticle&ID=2348013

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